Download ROSC 2015

ROSC 2015
Report On Observance Of Standards
And Codes
Accounting & Auditing
Bank-Fund Joint Initiative on Standards & Codes
Twelve Standards and Codes – financial stability
Macroeconomic policy and data transparency
1. Data Transparency
2. Fiscal Transparency
3. Monetary and Financial Policy Transparency
Financial Sector Regulation & Supervision
4. Banking Supervision
5. Securities Regulation
6. Insurance Supervision
7. Payments Systems
8. Anti-money laundering
Market Integrity – institutional and market infrastructure
9. Accounting
10. Auditing
11. Corporate Governance
12. Insolvency and Creditor Rights
2
2
Figure 1.1. GDP Growth and FDI Inflows
Country Context
• End of civil conflict
• Middle Income Country status
• SL ranked highest in South Asia
for ease of doing business
• Development of the BPO sector
Figure 1.2, Capital Market Development
Objectives of the ROSC
Support Sri Lanka’s growth by:
 Improving the investment climate
Strengthen private sector transparency and accountability
Strengthen regulators
 Supporting structural shifts in the economy and social inclusion
 Strengthening the public sector
Approach
Statutory
Framework
Education &
Training
Accountancy
Profession &
Ethics
Accounting
Standards
Auditing
Standards
Monitoring,
Enforcement
& Oversight
Global
IASB
(Financial
Reporting
Standard Setter)
Sri Lanka
SLAASMB
CBSL
(Bank and NBFI)
IFAC
(Auditing, Ethics,
Education, Public
Sector Standard
Setter and apex
body for PAOs)
Profession
SEC & CSE
CASL
Registrar of
Companies
Standard
Setter for
A&A
Other Local
Bodies
Accounting
Bodies
AATSL / ICMA
CIMA/ ACCA
State &
Foreign
Universities
IBSL
6
Stakeholder Consultations
• CASL – main partner
• PFM Steering Committee
• Preparers of financial
statements
• SME and Financial Institutions
• All PAOs
• Auditor roundtables (large and
SMPs separately)
• All regulators (separate
meetings), Registrar of
Companies, Dept of Inland
Revenue
• Auditor General
• DG MOF (SOE)
• Chamber of Commerce
• Statutory Auditing Standards
Committee & Accounting
Standards Committee
• Learning providers
• Ministry of Finance
• DG’s and staff of State
Accounts, Public Finance,
Public Enterprises
7
Achievements and Challenges
• Achievements
Structural
Changes
• Contributes to the growth of a
knowledge hub
• Professional Education aligned with
international education standards
• Challenges
• Growth of profession is mainly
Colombo centric
• Qualification framework is not in
place
• Credibility of SME financial
reporting
8
Achievements and Challenges
• Achievements
Investment
Climate
• Adoption of international reporting and
auditing standards
• Introduction of simplified standards
• Introduction of audit quality assurance
• Issuance of updated Corporate Governance
Code
• Increased capacity and efficacy of regulators
• Challenges
• Requirement of new skills
• No legal backing for the simplification
agenda
• Dual Reporting – CBSL & Inland Revenue
• Registered Auditors/ low capacity SMPs
Achievements and Challenges
• Achievements
Public
Sector
• Professions Support to the Public
Sector – Reporting
standards/Training/Qualification
• SOEs following IFRSs
• Challenges
• SOEs – quality and timeliness of
reporting
10
Policy Recommendations
Statutory Framework
• Companies Act
• Differential reporting
• Require sufficient information on annual
return
• Information to the Registrar of
companies
• Auditor Categories
• ICASL Incorporation Act
• Registration of practicing audit firms
Local PAOs
• Code of Conduct and disciplinary
procedures of members
Policy Recommendations
Auditing Profession
• Develop policy for re-admitting auditors who
have been out of practice for more than 3
years
• Voluntary merger program for sole
practitioners
Education & Training
• Expand National Quality Framework to
include all PAOs
• Implement structured framework for
monitoring learning providers and employers
• Monitor CPD and sanction non-compliance
• Reduce disparity in service between Western
Province and other provinces
Policy Recommendations
Accounting & Auditing Standards
• Revisit representation of professional accounting
organisations in standard-setting
• Increase influence at international standards setting level
• Increase support for preparers of financial statements
• Customised training for key stakeholder groups
• SMEs, SMPs, CASL, chambers of commerce and providers of
capital must work together to facilitate access to capital
Monitoring, Compliance & Enforcement
• Enhance methodologies, capacity and information sharing
processes
• Enhance SLAASMB reviews to adopt more risk based
methods
• Implement a mandatory audit quality assurance review
process for audit firms to fully implement SLSQC 1
Thank You